International real business cycle models are not able to account for the high volatility of imports, exports, the trade balance and the terms of trade. By introducing exogenous exchange rate movements in addition to standard technological shocks, the model presented here comes much closer to...

International real business cycle models are not able to account for the high volatility of exports, imports, the trade balance and the terms of trade. By introducing exogenous exchange rate movements in addition to standard technological shocks, the model presented here comes much closer to...

Multi-country models have not been very successful in replicating important features of the international transmission of business cycles. This paper extends previous work by introducing multiple sectors and traded intermediate inputs. Trade in intermediate goods represents approximately 60% of...

**The following is a description of the paper and not the actual abstract.** Why are business cycles statistics so different from one country to the other, at least for trade related variables? This paper tries to replicate this feature of the data in an international real business cycle model...